South Korean Won: Policy support tempers KRW losses – MUFG

FXStreet Insights Team FXStreet

MUFG’s Hardman links a sharp correction in South Korean AI‑heavy equities to potential pressure on the Korean Won. USD/KRW hit a fresh high above 1,560 after strong US jobs data, but then fell about 1.5% as authorities unveiled emergency FX measures, including tighter oversight of offshore derivatives and enhanced scrutiny of suspected misconduct and illegal transactions.

Equity selloff and emergency FX response

"The sharp correction lower for South Korea’s equity market which is dominated by the AI tech stocks of Samsung Electronics and SK Hynic Inc, could add to selling pressure for the Korean won. Foreign investors have already been heavy sellers of Korean equities so far this year."

"USD/KRW hit a fresh high of 1,562.3 on Friday after the stronger NFP report but has since dropped by around -1.5% overnight in response to emergency measures announced by domestic policymakers to provide more support for the won."

"South Korea announced a response plan including tighter oversight of offshore currency derivatives, inspections targeting suspected market misconduct, and probes into potentially illegal foreign exchange transactions after an emergency meeting with the heads of the Bank of Korea and financial regulators."

"The latest measures build on earlier steps including allowing the National Pension Service to expand FX hedging and easing rules to improve dollar liquidity."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD advances modestly, hovers around 0.7050

AUD/USD reverses part of Friday’s sharp decline and gyrates around the 0.7050 region ahead of the opening bell in Asia. The pair’s modest recovery comes amid humble losses in the Greenback, always amid the steady uncertainty on the geopolitical front. Moving forward, Westpac’s Consumer Confidence measure will be the salient release on Tuesday.

USD/JPY holds higher ground toward 160.50 despite 'Yentervention' fears

USD/JPY holds higher ground toward 160.50 in Monday's Asian trading, despite intervention fears. Japan’s revised GDP print, which confirmed that the economy lost momentum in the first quarter, weighs on the Japanese Yen. Meanwhile, Friday's upbeat US NFP report and fresh Israel-Iran attacks favor the US Dollar bulls, underpinning the currency pair.

Gold faces initial resistance near $4,350

Gold manages to reclaim the $4,300 mark per troy ounce and above on Monday. The yellow metal’s small uptick comes on the back of modest losses in the US Dollar, while traders continue to follow geopolitical events in the Middle East and the likelihood of a tighter-for-longer Fed.

Why institutions prefer Solana over newer rivals for stablecoin adoption – Solstice CEO

The cryptocurrency industry has entered a new era spearheaded by stablecoins, real-world asset (RWA) tokenization, decentralized finance (DeFi), and Artificial Intelligence (AI) applications.

$1.75 trillion: Is SpaceX the most popular IPO in history, or the most engineered?

On June 12, the largest initial public offering (IPO) in history is set to hit the tape, and almost nobody is asking whether the price is right, because almost everybody already wants in.

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.